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News/Business. A focus on issues facing small business in the United States.

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Us 9, Rob Basso 4, Micah 4, Stella 3, American Express Open Gold Card 2, Sammy 2, New York 2, Washington 2, Rob Burke 2, United States 1, Victoria 1, Adam Schwartz 1, J.j. Ramberg 1, Micah Rosenbloom 1, Kathy 1, Sba 1, United States Postal 1, Freelancers Union 1, Adam 1, Carl 1,
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  MSNBC    Your Business    News/Business. A focus on issues  
   facing small business in the United States.  

    February 18, 2012
    5:30 - 5:59am EST  

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small business owners say lower our taxes. and a carpet store owner hooks up with a co-op to go wall to wall with the big chains. we'll have all that and more coming up next on "your business." small businesses are revitalizing the economy.
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hi there, everyone. i'm j.j. ramberg. welcome to your business. we give you tips and advice to help your business grow. here's a question for you. what do big commercial names like ocean spray, land o lakes and ace hardware have in common? the answer is they are all commercial cooperatives, owned by members who use these organizations to increase their purchasing power and reduce marketing, hr and other expenses. it turns out there are many cooperatives like these in all kinds of industries. today, we take a look at how independent businesses are wo working together to survive the tough economy. >> carpet stores were closing up like flies around here. and i says, it's not going to be us. >> fran frincovela is certainly
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a realist when it comes to business. >> we were in desperate, desperate shape. >> hi. nice to meet you. >> we just hung on and worked hard, cut back some salaries, cut back some help. >> the big boks were coming in, lowe's and home depot were coming in, taking most categories and upon monopolizin them. >> he is a fighter, located in manchester, new hampshire, his organization helps the small fries. >> the local independent business person has the brains. and they have the talent. but they don't have the scale. >> individually, none of these small businesses has much buying power. but together, as members of the cca retail cooperative, they can compete with anybody. >> you have to level the playing field. and i think what we do is we level the playing field so we have the same tools on the same scale as the big boxes. >> the carpet one cooperative
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membership is made up of more than 1,100 flooring retailers. >> when we buy something, we're buy i buying it at x amount. i have no idea what the guy down the street is buy iing it for b there's no way he can buy it what we can. we have 1,100 stores. how can one independent retailer buy it at the price we have? >> we buy, literally, millions of floor covering which puts in the same category as home depot, lowe's. >> you realize howard's retail cooperative is a very, very large business. >> we're actually bigger than starbucks. we're bigger than bed, bath and beyond. that's our combined -- all the different divisions we have within the cca global partners. >> for the frankcovellas, membership in the cooperative gives them the extra leverage necessary to get the price breaks they need to survive. >> you own your own store, but
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you buy your merchandise as a co-op with all these other dealers. so, carpet one has all this clout. >> the more you buy, the better you buy it for. it's kind of like bulk food. the larger the purchasing power, we have better pricing. >> kathy buchanan is fran's daughter, one of three siblings who now runs the day-to-day prayings. >> too yellow. let me have a roll of the sand storm as well. this would probably sell for $4 a square foot. i have it at about $2.28 a square foot because i bought it at an amazing price point. i then can turn that savings over to the consumer. >> francavellas are also the shareholders. they receive rebate checks that collectively total into the million millions. >> if we were not members of the carpet one club, i wouldn't have a rebate check to make my mom happy with two times a year.
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it's like, how much is that rebate check, sweetheart? >> i got the rebate check. i think you're going to be very, very happy. it's about double what we got six months ago. i know. >> this coming summer, we'll reach $1 billion of rebates back to the client, which is an amazing number. in a typical year we'll pay back $35 to $40 million. >> they've managed to survive the recession much better than nonmembers. >> you look at the industry, at the start of the recession four years ago, there was 16,000 independent floor covering stores. today it's less than 12,000. 4,000, 25% of the industry was gone due to the recession. we had a net loss of the membership within our system of only 50 people beginning of the recession to the end of the recession. >> it has a velvety look to it. there's something a little more velvety and a little tighter.
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>> the whole landscape has changed. people have lost their homes, their jobs, everything. half the houses are upside down. so, they are watching every penny. >> we don't want you to pay your c.o.d. until you're totally satisfied, 100%. >> first of all, they would be paying more for their product on the floor. they would not have the scale. second, they would be paying more for insurance. they would be paying more for marketing and have less sophisticated marketing. >> at the age of 82, fran still has big dreams for the store, which she and her husband, carl sr., started 44 years ago. she takes great pride in the dedication of her three children, carl, bob and kathy. >> i don't know how many people have children that work with them and love what they're doing and have a future. it actually makes me tear up, because for them to love the business and know that it's going to pass on to them is a
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wonderful thing. many small businesses can benefit by opting into co-ops. let's find out a little bit more by turning to this week's board of directors. adam schwartz is the founder and principal of the cooperative way. micah rosenbloom is a partner at founder collective, a seed stage venture fn fund and stella gravant designs creative team building experiences. great to see all you guys. >> great to be here. >> adam, this is interesting. we were having a conversation for carpet one, part of this collective, you have to be carpet one. what if you have your own brand and you're being clobbered by the big guys and you want to get purchasing power, can you join a cooperative and not have to change the brand? >> some operate by having a shared brand and others operate by maintaining the local brand but still have the buying power behind the scenes. it's a decision that the
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cooperative members make themselves. what's so powerful about the model is that the owners decide. ta es not a fwroop of outside investors that are doing so. the model has been around in its modern form since 1844 and works in all different size of businesses. >> if you think this sounds like a great idea, what do you do? >> for businesses there's purchasing co-ops from every sector, hospital, furniture, plumbing supplies, air conditioners, whatever it is you might be in. there's also other types of cooperatives, producer co-ops, welch's or farmer's natural. housing co-ops where consumers own the co-op and finally worker co-ops where workers own the business. it depends on what people's interests are, the type of co-op they want to join. >> what questions should you be asking? >> i actually have a question
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about, what about freelancers and service-oriented people? can they create co-ops? i feel like there's a rumbling of collectives popping up that act like co-ops but might not know it. what about independent people who are marketers, accountants, lawyers, can they rally together to get a cheaper share of voice out there so they're not the little guy fighting the big guy? >> that's a really good question. i've formed an affiliation with a group called -- it's a cooperative consultants. people scattered throughout the country but we share resources, website and other information. there's also a group called the freelancers union. it's not a cooperative but cooperative spirit in that they're working together to give health care benefits to those folks. >> what are the dangers of this? i mean, it sounds great, right? you get your products cheaper, you get marketing. you're not paying as much for. now you have to dole with other
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people running your own business. >> absolutely. there is a slight loss in independence that you are going to have to give up. but it's for a greater good, so you can get the scale so your business can be sustainable. you have to measure whether it's the right fit for you. >> i'm curious, micah, you work with a lot of small companies. does this sound like something that would fit with the companies you work with or no? >> yeah. i was just thinking, what is the role that technology and internet play? i can see it from both sides. on the one hand, the internet has made it easier for small business to get a presence, build a marketing presence. on the other hand, it's very noisy and incredibly hard to rise above that, because everybody can build a presence. so, if you're seeing that as the internet has grabbed hold and more and more small businesses are online, is it incentive to join a co-op or does it mean it's actually easier to stay independent because you can
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market your wares and so forth? >> there are web designers and cooperatives that have come together in the service-oriented area. one thing that makes co-ops such a powerful business model is that all co-ops live by the seven co-op principles. so people do this on a voluntary basis and they have economic participation and member control of the business. so, it works in a variety of different types of businesses. there's really no sector of our economy that it's untouched by. it's a matter of creating. >> i just want to end this by saying is there one place that somebody can go if they have questions about this? >> there's a variety of organizations, depending on the sector you're interested in. there's a lot of information available, obviously, on the web and through our organizations to support the types of businesses you might be interested in. >> you have to do your research? >> right. >> great. this was great and really
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important for small businesses to know. a lot of small businesses don't know about cooperatives. thank you so much for your advice here. social networking is a great way to get the word out about your business. but is your staff on board? here now are five ways to make your company more social, courtesy of mashable.com. one, give tutorials. people won't tweet if they don't know how to use twitter. host a few facebook and twitter tutorials across the country. find influences within the company. you probably have several employees who love social media. recognize these employees and highlight their work. three, launch a fun contest. consider recording everyone's klout score. follow up with incentives and recognition. four, engage. highlight team members facebook and twitter on the account. it will encourage them to check
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more often and get involved. number five, focus on fun ways to use twitter. how to use a hash tag they can relate to. using twitter for fun will get them familiar with the social media platform and show them way s it can also be used for work. washington has been talking small business. just last week, president obama proposed a series of tax breaks, including income tax and small business investments. then, house republicans announced their own plan, which proposed giving a 20% tax cut for companies with fewer than 500 employees. there are a lot of ideas on the table. we want ed to know which ones w thought would help your small business. we took this to small business owners around the country and got their reaction. joining us for this week's small biz sound off is the owner of wayne auto spa in wayne, new jersey, and a registered democrat.
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in the last election, rob voted for president obama. and rob basso is from freeport, new york. he's a registered republican who voted for john mccain in 2008. >> thanks for joining us. you had both interesting responses and passionate responses to these proposals. i want to start with you here on the set. >> sure. >> when you hear about these tax incentives, is your first reaction i'll hire new people because i'm going to get a tax credit? >> it makes no difference to me if they're going to give me tax incentives in terms of how i staff my business. >> why not? >> i try to staff my business mostly based on how things are going and what our needs are. if they give me a tax incentive that means i'm going to hire more people independently of having more customers? no. >> in essence, for you, you're then getting reward ed for something you would do any how? >> i think that's part of it. the rest of it is, sure, if you want to give me money, i would
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be happy to take it. i would like to know how we're actually going to pay for it. >> we'll get to those bigger issues in a second. let's start with the proposals. what's your take on the credit for people, businesses who hire people? >> on this issue, i tend to agree with rob. the last time i checked, you're not going to hire somebody just because there's a tax incentive. if you don't have the business lined up or clients that need more servicing, you're not going to extend yourself. right now the american people have pushed their assets to the limits. they're going to start hiring regardless of what incentive is in place. more money in small business owner's hands means more jobs. >> that gets to what republicans are talking about, in part, which is a 20% tax cut for small businesses. would that help you and the small businesses you wrk with? and how? >> absolutely. i service thousands of small
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businesses. fortunately, i do quite a bit of public speaking. a lot of the feedback i ges get is if there were more money in our hands, we would be expanding our businesses, marketing more, putting more people on our staff to grow. if i built a building in what's called the new york state empire zone and got incentives to grow my base and keep the company growing, not only have we exceeded expectations, but that money has done so much for the community and local environment, these programs work but they only work when the money gets back to the job creators in america, not the politicians and certainly not the government. >> when you hear a plan that says i'm going to cut your taxes, what's your reaction? >> i don't know that it's going to change the way i run my business, to be honest with you. i don't think i'm going to invest in capital equipment any more quickly than i do now.
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can it be bigger? sure. i can always make more money. again, i'm happy to take the donation. i would like to know how it's going to get paid for. i feel like these proposals are efforts to buy chunks of votes in important segments to the people running for office and are really narrowly focused without a focus on the big picture. >> the big picture to you is -- oh, sorry, rob basso, go ahead. >> do you mind if i disagree with rob, at least the way i handle that situation? you talk to enough business people, rob, you have mentioned you wouldn't increase investment in your organization if your tacks were lowered and you had more cash. i think a lot of business owners think completely opposite. i know for me, personal, a lot of people i communicate with, if they had more money in their pockets, personal or business, they would absolutely be xanding their businesses, just polar opposite of what you just said. >> i guess, you know, quick response is the devil is in the details. i think it depends on the nature of the small business, how successful or unsuccessful it is
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and what the growth opportunities are and what challen challenges they're facing. >> so, do you feel, rob burke, that these things are too big? they're giving money to everyone when, in some of these cases, when they need to cherry pick a little more? >> there's certainly an element of one size fits all when it really doesn't. i agree with that. that makes sense. >> when washington talks about small business, often times they talk about companies that are smaller than 500 people. does that ring true? something that's going to help a 500-person company, rob basso, is not going to help a 10-person company, necessarily. >> i don't think the programs match up. sba's definition of a small business is 500 employees or under. if you look at the local landscape in and around any major urban area, you'll find it's more six to ten. a six to ten-person employer shop doesn't have the same needs, issues or wants as a 465-person machine shop some place. unfortunately, in this case, i
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agree with rob. it is not a one size fits all situation. and i think the new republican candidates and the current administration need to really look and segment the employment situation a lot more than they're doing now. sba does a great job. they're within the confines of the administration that's currently in power. i think they could do a lot more with the sba with different managers. >> rob burke, rob basso, thank you very much for joining us on "your business" sound off. we really appreciate it. earlier this week we asked our viewers what type of tax breaks would help their company. here are a few of the responses. christine said she wanted no employment tax at all. reginald wants tax cuts for local hires, banking local and using the united states postal service as your primary shipper and alex said she wants no self employment tax for two years. what do you think? let us know on twitter.
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it's @msnbcyourbiz. how do you create a brand to get people to buy into buying healthier? and lingerie line. shazi: seven years ago, i had this idea. to make baby food the way moms would. happybaby strives to make the best organic baby food. in a business like ours, personal connections are so important. we use our american express open gold card to further those connections. last year we took dozens of trips using membership rewards points to meet with farmers that grow our sweet potatoes and merchants that sell our product. vo: get the card built for business spending. call 1-800-now-open to find out how the gold card can serve your business.
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>> valentine's day is just days awa away. >> hello. my name is precious williams. i'm an attorney turned lingerie designer. there are 14 million women size 14 or larger in the united states just like me. we all want pretty underwear. curvy girls lingerie comes in. curvy girls lingerie creates designs and designs lingerie to celebrate the beauty of a curvy woman. original, and fresh designs. we also won a major business plan competition. $500,000 for the if following
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things, to create and manufacture our own house brand, to develop our online marketing campaign and also to completely revamp our website. in exchange, i'm willing to give a 25% stake in my company. thank you. >> precious, that was one of the best pitches i have seen on this show. >> thank you. >> nicely done. >> thank you. >> that's my opinion. which, actually, doesn't count, i'm sorry to say. so, micah, let's start with you. you hear a lot of pitches. did she get everything in there? >> i thought it was really impressive. i think you're right. you're capitalizing on an opportunity that's probably underserved right now. two things you said i would want to think a little bit. pitch for $500,000 sounds like a lot. that would be valuing the business at $1.5 million. is the business worth $1.5 million today or are you giving away too little of the company or asking too much in capital? the other thing that made me a little nervous in the pitch was it sort of felt like you were vp of manufacturing, vp of design,
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vp of sales. that is a little bit of the entrepreneur's job but you don't want to boil the ocean. you want to pick -- perhaps it's the design you really want to win at. you can either find a partner to help with the other stuff or find other stores to carry it and don't spend as much time on the web but pick what part you're going to really own and be really good at. >> and stella? >> great advice. i love the story that you created, from yourself. it's about you. you're representing 40 million other women. you set out the market size. just fantastic. what i want to hear is how are you going to set yourself apart from your competitors? what's going to happen when v victoria secret hears about serving curvy women? how are you going to continue and maintain your brand and really stand apart from them? >> would you guys, based on this pitch, knowing what more you want to know, take another meeting? stella? >> absolutely. >> micah? >> same here. >> nice job, precious. thank you so much for your help
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with this. if any of you out there have a product or service and want feedback from our elevator pitch panel on your chances of getting interested investors, send us an e-mail. your business@msnbc.com. please include a short summary of what your company does, how much money you're trying to raise and what you intend to do with the money. you never know. somebody out there watching the show might be interested in helping you. it's time now to answer some of your business questions. stella and micah are with us once again. the first one is from david. he writes i have a great product. and i had some partners in the beginning that didn't work out. i'm the sole owner now and i am terrified to get more partners. i'm growing fast and have been approach bid several people interested in a partnership. if i take on partners, what do i ask in return for my shares of the company? great question. what do you think, micah? >> i'm faced with this a lot with some of our businesses. it's always hard to take in a partner. the analogy we always say is date before you get married. to the extent that you can start
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working with somebody, get a little feel for how it's going to be, pay them on a consulting basis or say, look, i'm not prepared to commit to your involvement in this business. let's start working informally and see where it goes. that's always better than rushing to form a partnership really early. often times that doesn't end well. >> what do you think, stella? >> the very fact that the question's being asked means that the role this partner is going to play isn't defined. and the strength that they're going to balance out in the team isn't clear. if you're going to take someone on, make sure that they're a genius at something you're not and really contributing. also, your equity is the most valuable thing you have in a small business. so often small businesses are hand i handing it out for things like a website and logo. hold on to that for as long as you can until you really need a partner. >> seems to me, also -- a lot of people forget to have these really big talks. emotional talks. logistical talks, emotional
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talks about how are we going to work together? >> right. >> what are we going to do if it doesn't work out? >> what happens if you have a baby? what happens if we celebrate different holidays? little things like that matter. >> health conscious customers come to my business because of our name and concept. if we go after the general population, how do we create a new message to get everyone? so, you're wondering what the company is. >> the general population, one out of three people is obese. i'm not sure how that's a different message necessarily. what i would really -- i mean, first of all, they manage their market research. chains like energy kitchen all along the east coast, doing a great job selling good food under 500 calories. their logo -- or their motto is fast food does not equal fat food. they leverage the energy message. if you want to be a little more
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progressive and not target weight loss, which happens to be a $60 billion industry, which is not a bad thing, you can go for like energy if you want to talk about something that appeals to everyone. >> i just wonder why this company feels the need to go mass market. one of the things people forget is strategy is as much about what you're not going to do as to what you are going to do. it may be very tempting to get into the mass consumer market but they may be able to carve out this great niche of the third or whatever percentage of americans that are very health conscience and become very focused and very well known within the demographic why your trying to hit. >> and if the food is good, target that demographic but the word is going to get out, i think. >> that's right. >> thank you for those words of advice. very helpful. if you have a question for our experts, go to the website. the address is openfor
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openforum.com/yourbusiness. once you get there, hit the ask the show link, submit a question for the panel. openforum.com/yourbusiness. or e-mail us your questions and send us your comments to yourbusiness@msnbc.com. do you wish you had a panel of experts available to bounce ideas off of and answer all of your questions? check out our website of the week. ohours.org connects you with people who are available for in-person, phone or video chat office hours. you can choose who to consult with, based on their specialties and availability. product design, programming, marketing are some of the topics listed. it's also free to host your own open hours. to learn more about today's show, click on our website. openforum.com/yourbusiness. find all of today's segments, plus web content to help your business grow. don't forget to become a fan of
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the show on facebook or follow us on twitter. @msnbcyourbiz. entrepreneur had an especially i epiphany. >> i said with this kind of overhead we need to close the store and get mobile. >> taking the store directly to the customer instead of making the customer come to you. remember, we make your business our business. sam: i'm sam chernin. owner of sammy's fish box. i opened the first sammy's back in 1966. my employees are like family. and, i want people that work for me to feel that they're sharing in my success. we purchase as much as we can on the american express open gold card. so we can accumulate as many points as possible.